Prices for cold rolled coil may come under pressure as a result of fresh labour discord in the US automotive industry, Kallanish learns from surveying steel market participants.

Negotiations between the United Auto Workers (UAW) and the three largest automakers got off to an alarming start last week, with the union leadership presenting a long list of demands that General Motors (GM) management immediately complained would be too costly.

“UAW members are thinking big and the Big Three can afford it,” the union says in a statement, noting that Ford, GM and Stellantis reported a combined $21 billion in profit in the first half of 2023.

“Record profits mean record contracts,” UAW president Shawn Fain emphasizes in a Facebook Live message to members.

Among the UAW demands are double-digit-percentage wage increases, more paid time off, the elimination of wage tiers and the restoration of automatic cost of living increases, a defined-benefit pension and retiree health insurance. The union also insists on changes in the usage of temporary workers and the right to strike over plant closures.

GM management says it is ready to grant the autoworkers a pay raise, but the other demands “would threaten our ability to do what’s right for the long-term benefit of the team.”

The current labour contract expires on 14 September. A strike would reduce the demand for cold-rolled coil, according to steel market participants. Even a looming threat of a production stoppage in the next few weeks likely would hurt sentiment for distributor stocking of CRC and especially for import orders.

CRC has been a bright spot for the domestic steelmakers, who report higher volumes shipped to automakers as they produce more inventory to catch up with vehicle demand (see Kallanish passim).

The UAW already is in the midst of one strike in the US. Union members walked out at Thombert, which produces forklift wheels in Iowa, on 1 August. At issue there are wages, vacation time, disability benefits and more favorable shift rotations.

In Canada, the Unifor union also is entering negotiations with the Big Three automakers.